Diamondbacks minority owners sue Ken Kendrick over buyouts
Three minority owners of the Arizona Diamondbacks are suing managing general partner Ken Kendrick after Kendrick initiated a forced buyout for stakeholders who own less than 1% of the team, according to The Athletic’s Zach Buchanan. The three plaintiffs are businessman Alfredo Molina, former pitcher Jim Weber and an LLC called Carlise Investments.
The lawsuit alleges that Kendrick’s demand that minority owners with less than a 1% share either increase their buy-in or sell their shares at a price set by the team is illegal. The Diamondbacks say that the plan is supported by MLB, which the league confirmed to The Athletic. However the full extent of MLB’s support is unclear. Kendrick’s side says that MLB wanted the Diamondbacks to streamline the ownership group, while the plaintiffs say that the league merely okay’d Kendrick’s initiative.
Although just three of the minority owners or ownership groups are named as plaintiffs, the buyback plan reportedly impacts 22 total persons or groups. The buybacks don’t seem to be driven by coronavirus-related financial concerns, as Kendrick announced his intentions to the rest of the owners in a letter sent on January 13th.
Buchanan’s article has the full legalese details of the dispute, and I’m no corporate lawyer, but this reads like Kendrick trying to consolidate financial power. Kendrick has gained a miserly reputation, and has recently made headlines by squabbling with local officials and claiming that Chase Field is somehow a subpar facility for baseball. The Diamondbacks have reportedly toured Vancouver twice in the last two years, including B.C. Place Stadium.
The Athletic’s report says that Kendrick could control a voting bloc within the Diamondbacks’ stakeholders that controls as much as 90% of the team.
Arizona has made the playoffs just three times since 2004, when Kendrick became managing general partner.